A chargeback is when you bought something, paid for it with a credit card and it didn't come as advertised or didn't come at all. You don't get satisfaction from Paypal because the seller is a deadbeat, has no money in his account,they cannot pull money from your bank account without specific permission for EACH transaction... a chargeback is a separate transaction. So you call your CC company and they give you your money back and charge the "vendor" Paypal.
OR you sold something to someone, he gets it, claims he didn't or claims it's not as you said it was. And then had his credit card company cancel the transaction, which then "pulls" the money from the sellers,or transaction company "paypal"'s) account.
The net effect is, you sell something.. buyer says he didn't get it or whatever else. You prove he got it, then he says well yeah I got it but it wasn't as advertised.... Paypal will take the money from your account,if you have any). The guy gets your stuff and his money back. OR paypal agrees with you so the guy files a chargeback with his credit card co. He gets his money back, he has no money in his paypal account so paypal comes after you!!!!! You have no merchandise and now paypal wants you to "reimburse" them for their loss.
It's against paypals user agreement for any "member" to file a chargeback on a credit card transaction. HOWEVER, if the other guy breaks the rules they can come after you. It's in the agreement and it happened to me. I told them to get screwed. They turned me over to collections and I had to get the state banking commission involved to make it go away.
Also you have to read the agreement very carefully.... their "insurance" has a ton of "conditions" that when a deal goes sour can be very hard to comply with. Especially on transactions that are over $250.
Also, many people buy and sell things through paypal that are not allowed.... if you are on either end of such a transaction and there's a problem.... if the other guy says well I sold him "porn" or I sold him "ammo" or hi-cap mags...even if he didn't, you just lost your case.
Paypal is being sued by a number of states and has been under investigation by the Feds for "subverting banking laws". Paypal is not a bank, but they do business just like one... they don't want to be a "bank" because then their operations are regulated.... in other words they can't pull the crap they're pulling. Many states are trying to force paypal to to abide by those states banking laws, set aside reserves, protect deposits etc.
Also IF they were a bank, they couldn't put limits on how you spend your money... what you buy with it etc.
Paypal is convenient, they can run their business however they want. They'll never get a nickel from me again.
And their customer service is a nonexistant joke. Looking back on it, I can't believe I ever spent money with them in the first place.